Selling a FRA is the same as:
A) Making a forward-forward loan
B) Going over-borrowed
C) Opening a positive gap
D) All of the above

Question

Quizplus · Accepted Answer

Selling a FRA means agreeing to lend money at a fixed interest rate in the future. This is essentially the same as making a forward-forward loan, where the lender agrees to lend money at a future date at a fixed rate. Going over-borrowed and opening a positive gap are not related to selling a FRA.

Selling a FRA Is the Same As